Meta sends mixed signals as quarterly sales beat estimates but outlook muted
The Hindu
Meta beat Wall Street expectations for fourth-quarter revenue on Wednesday but predicted sales in the current first quarter may not meet forecasts.
Meta Platforms beat Wall Street expectations for fourth-quarter revenue on Wednesday but predicted sales in the current first quarter may not meet forecasts, sending mixed signals about how its bets on pricey artificial intelligence-powered tools are paying off.
The Facebook and Instagram parent company expects first quarter revenue between $39.5 billion and $41.8 billion, compared with analysts' average estimate of $41.72 billion, according to data compiled by LSEG.
It reported revenue of $48.4 billion for the fourth quarter of 2024, well above analysts' estimate of $47.0 billion.
Meta shares were flat after the market closed but rose as CEO Mark Zuckerberg spoke optimistically about Meta's AI initiatives and how the launch of Chinese company DeepSeek's models, which tanked global markets this week, reinforced his conviction that open source AI is the right strategy.
"There's going to be an open source standard globally," Zuckerberg said on a conference call. "It's important that it's an American standard."
The forecast raised fresh questions about Meta's capital spending. The company relies on its core social media ads business to cover the costs associated with its AI ambitions and investments in "metaverse" technologies like smart glasses and augmented reality systems.
Last week, Zuckerberg announced that Meta plans capital expenditure of as much as $65 billion in 2025 to expand its AI infrastructure, while also increasing hiring for AI roles.
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